PROJECT PROPOSAL ON

GYPSUM, POWDER AND CHALK

MANUFACTURING FACTORY

PROJECT LOCATION: OROMIA REGIONAL STATE,

NORTH SHEWA ZONE, GERAR JARSO WOREDA

PROMOTED BY: MR. SHIMELES SEMEANEH

APRIL 2022
 Project Proposal on Gypsum Powered Manufacturing Project

Contents

PROMOTED BY: MR. SHIMELES SEMEANEH.....................................................................1

1. EXECUTIVE SUMMARY.....................................................................................................5

2. Introduction...........................................................................................................................7

2.1. Investment In Ethiopia...................................................................................................7

2.2. Company profile on MR. SHIMELES SEMEANEH....................................................8
2.3. Production description and application:........................................................................8
2.4. Project Objectives and benefits....................................................................................10
2.5. Mission vision and goal...............................................................................................11
3. PROJECT LOCATION AND MINERAL EXPLORATION............................................12

3.1. Location and socio economic status.....................................................................12

3.2. Demographics..............................................................................................................12
4. MARKET STUDY.............................................................................................................13

4.1. Past Supply and Present Demand................................................................................13

4.2. Demand Projection.......................................................................................................14
4.3. Pricing and Distribution...............................................................................................15
4.4. PLANT CAPACITY AND PRODUCTION PROGRAM..........................................15
4.5. Competitors Overview.................................................................................................16
4.6. Product distribution Marketing strategy......................................................................16
5. TECHNICAL ANALYSIS.................................................................................................17

5.1. Production process.......................................................................................................17

5.2. Materials and input.......................................................................................................18
5.3. Land building and civil work.......................................................................................19
5.4. Environmental impact assessment...............................................................................20
6. ORGANIZATIONS AND MANAGEMENT....................................................................21

6.1. Organizational Structure..............................................................................................21

6.2. Management.................................................................................................................21
6.3. Manpower Requirement and availability.....................................................................22
7. FINANCIAL STUDY........................................................................................................24

7.1. General.........................................................................................................................24
7.2. Investment cost............................................................................................................24
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 Project Proposal on Gypsum Powered Manufacturing Project

7.2.1. Fixed costs............................................................................................................24

7.2.2. Variable cost/ operation Cost................................................................................25
7.3. Project Capital and financing.......................................................................................27
7.3.1. Project Capital......................................................................................................27
7.3.2. Financing..............................................................................................................27
7.4. Revenue projection......................................................................................................30
7.5. Financial statements.....................................................................................................31
7.5.1. Projected Profit/loss statement.............................................................................31
7.5.2. Projected cash flow statement..............................................................................32
7.5.3. Balance sheet........................................................................................................33
7.6. Viability and other measurement.................................................................................34
7.6.1. NPV (Net Present Value)......................................................................................35
7.6.2. Payback Period (PBP)...........................................................................................35
7.6.3. IRR........................................................................................................................36
8. SENSITIVITY ANALYSIS...............................................................................................36

9. RISK ANALYSIS..............................................................................................................36

10. MONITORING AND EVALUATION..............................................................................38

11. CONCLUSION AND RECOMMENDATION.................................................................38

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 Project Proposal on Gypsum Powered Manufacturing Project

BASIC INFORMATION

 Name of the Promoter: MR. SHIMELES SEMEANEH

o Contact Address 0923274909

 Type of the Project: Gypsum, Powder and Chalk Manufacturing

Factory

 Project location Oromia regional state, North Shewa zone Gerar

Jarso woreda
 Project Capital: The total project capital is estimated is birr

26,373,150 of which:

o Birr 20,850,00080%) is for purchase Gypsum board factory

o Birr 5,526,150(20%) allocate for working capital

 Source of finance: the total capital of the project is financed by the

promoter equity and bank loan

 Birr 7,911,945 (30%) is contributed by the promoter

 Birr 18,461,205(70%) is to be financed by local banks.

 Man power requirement: 70 permanent employees (30 skilled and 40

unskilled) and 150 casual workers are benefited on this project

 Land requirement: the total area of land to require for this project is

3500 m2

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 Project Proposal on Gypsum Powered Manufacturing Project

1. EXECUTIVE SUMMARY

This project proposal proposed on establish of Gypsum Powder and Calk

Manufacturing Factory has been promoted by MR. SHIMELES SEMEANEH
Located in Oromia regional state, North Shewa zone Gerar jarso Woreda, which
is the potential area of gypsum mining product.

Gypsum powder is a natural product found in deposits throughout the United

States. It begins as a soft, white mineral rock and is processed to make a dry
powder. Naturally occurring gypsum is composed of calcium, sulfur, oxygen
and hydrogen. Gypsum powder is mainly used in building materials such as
drywall, but it is also useful in agriculture as a soil fertilizer and conditioner.
Gypsum can be also be used as a food additive to enhance the texture of
ingredients in processed foods

The total startup capital of the, project is 26,375,110 birr, Out of the total
capital, birr 7,911,945 (30%) is contributed by the promoter; while the
remaining balance of 18,461,205 (70%) is to be financed by local bank loan.
[

The purpose of the loan is to purchase machinery and working capital cost, the
promoter believes the loan has strengthened the relationship between the
investor and the bank, in addition to these loans and advances to various
sectors of the economy on the strength of viability and assessment of
concentration risk will increase the success of the business.

Plant capacity: the proposed project is producing 145,000(25kg bag) gypsum

powder and 10,000 (box) chalks per annum.

Profitability: The financial analysis of the envisaged project is carried out for
the following ten years. Based on the 10 years financial projections using the
income statement, cash flow statement and financial internal rate of return
(FIRR) and the following results are obtained
 Income statement: According to the projected income statement, the
project will generate profit beginning from the first year of operation.

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 Project Proposal on Gypsum Powered Manufacturing Project

Based on the 10 years financial projections the project average annual

net profit after payment of bank interest, depreciation and tax amounts
to birr 4.3 million
 Cash flow statement: The cash flow statement also shows a
substantial amount of cash surplus right from the first year of project
operation life. The cash balance grows from birr 4.79 million in the first
year to cumulative balance of birr 95.2 million during the 10th year of
operation indicating the capacity of the project to finance itself and
generate cash surplus for further investments.
 FIRR Computation: The computation of the project FIRR shows that the
project will profitably generate reasonable return on investment. Before
tax financial internal rate of return is calculated to be 33.1% this
indicates the project is financially viable with an internal rate of return
(IRR) of 32.8 % and net present value (NPV) 48.5 million birr at discount
rate 30 %.
 Socio economic benefits: The socio economic benefit of the project is

also very high.

o The project will provide 70 permanent employees and 150 casual

employees participate on the project.
o Produces Gypsum, Board Powder and Calk and provide for
customers competitive price, and generate
o Generate revenue for the government in form of taxes,
o Facilitate the transfer for good investment and also contribute
towards promoting the linkage sectors of the economy.
 Conclusion and recommendation:

 The Project is found to be operationally profitable & has The Project is

operationally profitable, viable & has significant socio-economic
benefits.
 We recommended that according to this attractive financial and
economic benefit of the project all concerned offices & financial
institutions should give their support to facilitate the implementation
of this plan.

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 Project Proposal on Gypsum Powered Manufacturing Project

2. Introduction

2.1. Investment In Ethiopia

Ethiopia is now becoming more and more investment friendly country. The
Government is creating favorable condition that would highly encourage the
private sector to be engaged in almost all areas of the economy. The country
with population of some 110 million offers significant domestic market for
locally produced goods and services. The country is also a member of the
Common Market for Eastern and Southern Africa (Comesa) offering huge
benefit of export commodities in preferential tariff rates to a wider
regional market.
The investment sector is a major determinant factor of economic development
for a country like Ethiopia. Both private and government investment is
usually considered as the engine of the economy. Private investment should
be encouraged to increase from year to year and investment constraints
have to be alleviated in order to pave the way for strong economic
development. However, there are investments that could not be undertaken
by privet sector due to its difficult nature, i.e high initial capital and long
gestation period. Such investments, such as major infrastructural work, have
to be spearheaded by the public sector, albeit with close collaboration with
the private sector.
However, the passed command economy system and the lack of experience
between both sides have made it so hard for a private sector to flourish in
Ethiopia.
But now-a-days, as Ethiopia follows free market economy, the role of private
sector is considered key for the achievement of the government’s economy
policy. Accordingly, the Federal Democratic Government of Ethiopia is
encouraging investors to invest their resources to contribute to the
development of the country in all sectors by avoiding all barriers and
facilitating all the menaces for investment.
By taking this encouraging as an opportunity, the promoter of the project
plans to establish Gypsum powder in Girar Jarso Woreda for the benefit of
the promoter, the district community, as well as the country as a whole.
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 Project Proposal on Gypsum Powered Manufacturing Project

2.2. Company profile on MR. SHIMELES SEMEANEH

The PROMOTER MR. SHIMELES SEMEANEH promoter has well experienced

in different business activities for the long period of time. During this time,
the promoters got a vast knowledge and skill on this field. With this reliable
experience, the promoter knows how to manage and lead any organization to
profit and they also know to how to handle different challenges in the working
environment. Moreover, the promoters have a very good reputation with
banks and different financial organizations

2.3. Production description and application:

gypsum powder, which consists of the core of the board and covering of the
core of the board and covering paper. It is widely used as construction
materials mainly for interior finishing like partition, walls, ceiling and
acoustic boards. Major raw materials are gypsum and hard board papers. The
plant can be categorizes as small-scale industry The raw material gypsum is
sorted and washed with water for removal of sand and other impurities. The
lumps thus obtained are then dried and powdered in pulverizer. The dried
gypsum powder is calcined in rotary drum- calcined using light diesel oil as
fuel. The low-pressure burner is used for calcination at a temperature of
160ºC to 180ºC. The process of calcination is done over a period of about 2
hours, so that one and half molecules of water is removed to convert the
gypsum (CaSo4 2 H2O) into plaster of Paris (CaSo4 ½ H2O). After cooling the
product (plaster of Paris) is further pulverised to a fineness of 150 meshes and
packed in airtight polythene lined gunny bags to avoid the plaster of Paris
from absorption of moisture. For manufacture of surgical grade plaster of
Paris, a mineral silinite, which is considered to be a purer variety of gypsum,
is used.
Most Popular Uses of Gypsum Powder
Gypsum powder (hydrous calcium sulfate) is a smooth white powder which is
created by heating of gypsum stone. The gypsum that is mined is heat dried,
crushed and processed to become a powder. The powder is made use of in
different agricultural, construction and industrial applications.

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 Project Proposal on Gypsum Powered Manufacturing Project

Fertilizer

Fertilizer which is based on Gypsum powder effectively makes loose the hard
layers of clay and hard subsoil in the garden. It enters into the clay matrix
and makes its structure loose. It enhances the soil composition, facilitates
root growth, air and water movement and prevents soil erosion and water
run-off. It converts salty soil into neutral soil, controls dust erosion and
reduces bulk compactness of tough soil. It prevents water logging by
improving the drainage capability of soil and makes magnesium harmless.

Gypsum powder enhances the effectiveness of soil conditioners and organic

fertilizers when combined with them. The content of Calcium of Gypsum,
balances excess micro-nutrients in soil like zinc, iron, manganese and
copper. It supplies sulfur, enhances grade of fruits and prevents any plant
diseases. The bonus is that Gypsum is neutral and will not alter the pH of the
soil.

Dry Walls
Dry wall is created with Gypsum powder. This powder is headed to evaporate
major part of its water content and carbon dioxide composition to form
Calcium Sulfate Hemi-hydrate, or Plaster of Paris. Plaster of Paris reconverts
back to calcium sulfate di-hydrate, when combined with water.

 This slurry is poured in between two thick sheets of heavy paper which is
flattened and set apart to form drywall. The resulting dry wall boards are
dried further, cut, finished and packed for sale. The dry wall made of Gypsum
is thermal resistant, fire resistant and provides sound insulation. It is durable
and easy to repair. Dry wall can easily adopt many finishes, such as wall
paper, paint and texturing. The dry wall is used for ceilings and interior wall
finishes. As such there is great demand for gypsum powder manufacturers in
Delhi.

Gypsum In Construction Work

The demand for Gypsum as construction material is high because of its
ability to provide an aesthetic and comfortable ambience. For example, it is

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 Project Proposal on Gypsum Powered Manufacturing Project

free of odor. As such, many features of exterior and interior construction are
dominated by gypsum products

2.4. Project Objectives and benefits

The main objective of the project is aimed at to maximize the return on

invested capital in the form of profit for the promoter. However, its
implementation will benefit the employee, the consumer society and the
government at different levels. In this respect the project is aimed to promote
the following objectives:-
 To maximize the return on invested capital through Gypsum Powder
and Chalk Manufacturing Factory
 To raise the significance and importance of the sector and thereby
raising its contribution to the national economic development,
 To distribute Gypsum production at competitive prices,
 By raising the quality and volume of Gypsu Powder and Chalk
 To provide gainful employment to a large segment of the population of
the project area and augment earning capacity at the grassroots level,
 Increase government revenue through the different forms of taxes,
which in turn used to facilitate social and economic development.

In general, the project is believed to have significant social and economic

benefits that accrue to the society, the region and the country beyond the
financial returns to its owner. In view of the country’s development strategy,
the project has a paramount importance of contributing to the supply of
Gypsum products and generates foreign earnings for the country.
The project focuses on the production of Gypsum product that has reliable
markets and thus, contributes to the foreign exchange earnings of the
country.

The project will also provide access to input and output markets for
smallholder market that work with the firm. All these supports will be
extended under the conviction that the fruit of growth induced by the firm
should be trickle down to the larger community.

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 Project Proposal on Gypsum Powered Manufacturing Project

2.5. Mission vision and goal

Vision:
To become a very successful businessman by providing dependable, quality
production, which can play a great role in filling the market gap and
satisfying customers at Addis Ababa and all the country.
Mission

 Mission of the particular project is to serve the government, non-

government organization, firms and individuals at Addis Ababa town by
exceeding minimum acceptable quality standards and by providing the
highest quality Gypsum product at the lowest possible but reasonable
price especially for government institutions and for private individual
households.
 To prove to other people that struggle for a better life and economic
independences can do business and bring change and can make a
difference if opportunities are given.
 To become financially liquid and guaranteed more than ever.
Goal

Objectives are the goals toward which activities of the business are directed
and one of the most important functions the business owner must perform is
setting objectives. This important aims of this sole proprietorship business
among others include the following highly interrelated general goals with each
other.
 To create employment opportunities for 99 permanent workers
 To become economically self-sufficient in the first year
 Become known as trustworthy quality wheat flour products like
Gypsum, Board Powder and Calk supplier in Addis Ababa & its
environs

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 Project Proposal on Gypsum Powered Manufacturing Project

3. PROJECT LOCATION AND MINERAL EXPLORATION

3.1. Location and socio economic status

Gerar Jarso is one of the Aanaas in the Oromia of Ethiopia. Part of the Kaba

Shewa Zone, Gerar Jarso is bordered on the south by Yaya Gulele, on the
west by Degem, and on the east by the Amhara Region.

3.2. Demographics

The 2007 national census reported a total population for this woreda of
67,312, of whom 34,467 were men and 32,845 were women; none of its
population were urban dwellers. The majority of the inhabitants said they
practised Ethiopian Orthodox Christianity, with 99.81% of the population
reporting they observed this belief

Fiche is a town in central Ethiopia. It is the administrative centre of the Kaba

Shewa Zone of Oromia and separate District. It is located about three km
from the main Addis Ababa-Debre Marqos road, Fiche has a latitude and
longitude of 9°48′N 38°44′E and an elevation between 2,738 and 2,782
metres above sea level.

Notable landmarks in Fiche include the churches Fiche Giyorgis Bete

Kristiyan and Fiche Medhane Alem Bete Kristiyan. The town is also home to
several notable Ethiopian painters of religious themes: Alaqa Gebre Selassie
Adil (1881–1975), Emealaf Hiruy (1907–1971), and Alefelege Selam

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 Project Proposal on Gypsum Powered Manufacturing Project

4. MARKET STUDY

4.1. Past Supply and Present Demand

Gypsum board is widely used as construction materials mainly for

interior finishing like partition, walls, ceiling and acoustic boards.
Therefore, the demand for the product is influenced by the dynamism in the
real estate sub sector mainly of residential and commercial building.
Nowadays, the use of gypsum board partition for commercial building has
become customary. Furthermore, high end houses, restaurants, pastries
and the like use gypsum board for ceiling and decorations.

The local demand for gypsum board was met only through import in the
past. However, recently a gypsum board manufacturing plant named
GH Industrial Plc has become operational. However, there is no available
data which indicates the production level of the new plant. Therefore, for
estimating the demand for the product the unsatisfied demand i.e. the
demand which is met through import is considered. Accordingly, the
quantity of gypsum board imported during the period 2002-2011 is given in
Table 3.1

Table 3.1 Import of gypsum board (in m2)

Year Import
2002 28,247
2003 11,901
2004 25,275
2005 54,998
2006 101,379
2007 236,634
2008 105,045
2009 281,953
2010 217,294
2011 380,323
Source: - Ethiopian Revenues & Customs
Authority.
As could be observed from Table 3.1, import of gypsum board exhibits a

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 Project Proposal on Gypsum Powered Manufacturing Project

substantial growth especially during the recent six years i.e. 2006--2011.

2
The average annual import, which was30,105 m during the period 2002-

2
2005, has increased by more than seven fold to an average of 220,438 m
during the period 2006-2011.For estimating the present unsatisfied demand
for gypsum board, a growth rate 13% which is equivalent to growth rate of
the contribution of the construction sector to GDP during the period 2001--
2010 is considered.

Accordingly, taking the 2011 level of import as a base and applying a

growth rate 13%, the present (2012) unsatisfied demand for gypsum board
2
is estimated at 429,765 m .

4.2. Demand Projection

The demand for gypsum board is directly related with the growth in the
construction sector in general and the housing construction sub sector in
particular which in turn depends on the overall economic development of
the country.

The contribution of the construction sector to the GDP during the period
2001 – 2010 have been growing at annual average growth rate of 13
percent which is above the average annual growth rate of real GDP
during the period under consideration (11.4 %), indicating a rise in the
share of the construction sector within the overall economy.
According to the GTP, during the period 2010/11 – 2014/15 the real GDP
of the country (at a base case scenario) is expected to grow at an average
annual growth rate of 11.2%. Moreover, during the same period the
annual average planned targets of growth for the construction sector is
20%.

Accordingly, by considering the above factors the demand for gypsum board
is conservatively assumed to grow at a rate of 10%. Accordingly,
projected unsatisfied demand is presented inTable 3.2.

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 Project Proposal on Gypsum Powered Manufacturing Project

Table 3.2 projected unsatisfied demand (m2)

Projected
Year Demand
2013 472,741
2014 520,015
2015 572,017
2016 629,219
2017 692,140
2018 761,354
2019 837,490
2020 921,239
2021 1,013,363
2022 1,114,699
4.3. Pricing and Distribution

The current factory price of Gypsum powder is between 125 and 160 birr
per bag(25kg) and chalk is 50 birr per box950 pcs) the detail as follows
S/N Raw materials unit Unit price
1 Gypsum powder for wall check 25kg bag 160
2 Gypsum powder for Design 25kg bag 125
3 Chalk 50 pcs box 50

4.4. PLANT CAPACITY AND PRODUCTION PROGRAM

Plant Capacity: Based on the market study on the one hand and
considering the minimum economic scale of production on the other, the
envisaged plant will have a production capacity of Based on the market
study and the economic scale of Gypsum powder, and Chalk is 145,000
(25kg bag) and 10,000 box respectively

S/N Raw materials unit Qty

1 Gypsum powder for wall check 25kg bag 75000
2 Gypsum powder for Design 25kg bag 70000
3 Chalk 50 pcs box 10000

Production Program: Allotting enough time, during the initial stage, for

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 Project Proposal on Gypsum Powered Manufacturing Project

market penetration and technical skill development, the plant will start
production at 80% of its rated capacity which will grow to 90% in the
second year. Full capacity production will be achieved in the third year and
then after. Details of annual production program are shown in Table 4.3.

4.5. Competitors Overview

In Addis Ababa and adjacent towns, there is a number of gypsum board

factories. Nevertheless, there are still a huge gab of demand and supply of
quality and standard products. Taking into account the aforementioned gap,
our campy after analyzing the complaints and comments given the
customers, we would like to demonstrate our excellence to perform well in
international and local make through.
 Committing to our promise entered to customers
 Having Quality production motto
 Transparent and price setting to compete in the market
 promoter long term experience and in the sector and reputation
4.6. Product distribution Marketing strategy

The distribution of product depends on the demand capacity and ability of

the customer’s. Due to this, the plan of this project has been producing in
such a way that: Understanding the characteristics and type of customers,
their capacity, Mechanisms of delivering.
As discussed earlier the major target groups of our product customers are
supposed to be: construction services, contractors, retailers, and individual’s
households. The project plan is to produce for domestic market during the
1st year to test and get confirmation to its quality from the local customers,
afterwards export to the international market, 25% by the second year, 50 %
by 3rd year and scaling up the export based on international market demand.

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 Project Proposal on Gypsum Powered Manufacturing Project

5. TECHNICAL ANALYSIS

5.1. Production process

Gypsum can be sorted to many types according to the different physical

&chemical properties, such as Natural dihydrate gypsum (it is also called
gypsum), hemihydrate gypsum (the calcined gypsum, namely building
gypsum, plaster), mould plaster, floor gypsum, etc. For their special
properties, gypsum has widely application in modern industry.
 
Application
1. Gypsum is important medicine drug.
2. Gypsum can be used to produce gypsum plaster, like building gypsum, high-
strength gypsum.
3. Gypsum is able to use to produce gypsum building product, such as dry walling,
fibrous plaster and Plasterboard, etc.
4. Gypsum is also used to make Portland cement.
 Construction industry, medicine industry, food industry and many fledgling industries.
 Gypsum Powder Grinding Processing Technology
1. The gypsum blocks usually bigger than the max. feeding size of gypsum grinding
mill, so they must be crushed by primary crushers.

2. Crushed gypsum are fed to the

gypsum milling machinery and be
discharged until they are grinded to
qualified products.
3. Gypsum powders are fed to
calcinatory.
4. According to industrial use, the
gypsum are used to produce different
products.

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 Project Proposal on Gypsum Powered Manufacturing Project

Technology Advantages
Currently, Clirik HGM or MTM Grinding milling machinery is the mainstream
equipment’s in gypsum powder production lines, and the powder size meet
most of our customer’s requirement very well. By using these two gypsum
Grinding mills, customers can find these advantages as followings.
1. The machinery use bevel gear transmission, the power is steady.
2. Special internal thin oil lubrication system ensures good lubrication,
efficiently prevent emission problems.
3. The curved air flue can efficiently reduce the resistance of airflow.
Meanwhile, the tangential airflow is good for distribute the minerals,
protecting the machine from being blocked.
4. Curved surface shovel with exchangeable blade, in this way, the running
cost is cut

Table 5.1 list of machinery and equipment and estimated cost

List of Machineries Unit Number Cost

S/N
set 1 5,500,000
Gypsum powder making plant
1 (Vibration, feeder, Grinding mill (jaw
crusher), cleaner (Vibrating Screen)
Separator
2 Peking materials set 1 1,500,000
3 Chalk production Line set 1 500,000
Grand Total 7,500,000

5.2. Materials and input

The plant will use gypsum powder as its main raw material for the production
of
Gypsum Board. Other Chemical additives will also be needed for making the
product. An auxiliary material for packing purpose, made in paper pulps, will
be needed with the brand name of the company. The above mentioned raw
materials will be supplied from the sister company of the gypsum quarry site
in Oromia Region, and the other chemicals will be imported from abroad. The

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 Project Proposal on Gypsum Powered Manufacturing Project

gypsum raw material required for the production gypsum board is estimated
at Birr 1,400,000.00 annually

Table 5.2annual raw materials requirement at full capacity and cost

S/N Description Unit Tone Unit price/qt Estimated Cost
1 Gypsum stone Tone 4,000 800.00 3,200,000.00
2 Paper Tone 210 10,500.00 2,205,000.00
3 Pulp tone 14 5,250 73,500.00
7,500.0
Additives 35 262,500.00
4 tone 0
Total 5,741,000.00
Packaging
Materials
1 Carton box Tone 2 500,000 1000000
Polypropylene
2 1 650,000 650000
bag, tone
Total 1,650,000.00
Grand Total 7,391,000.00

The major auxiliary materials required for the envisaged plant are packing
materials which comprise carton box, printed polypropylene film, scotch tape,
25 kg polypropylene bag, and sewing thread for bags. The annual
requirement for the auxiliary packaging materials at full capacity production
and cost is given in Table 5.2.

B. UTILITIES
The major utilities required for the plant include electric power, water for
general purpose, fuel oil and diesel oil for the process, and fuel and
lubricants for plant machinery and equipment. The total annual
requirement for utilities at full capacity production and the estimated
costs are shown in

5.3. Land building and civil work

The overall land require for the project is 3500 square meters. Land lease cost
is calculated the current rate of Oromia land and investment bureau and the
promoter/investor paid 5% in advance for land approval and construction
purpose and the remaining amount will be paid within 40 years per year .
Land use plan of the project

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 Project Proposal on Gypsum Powered Manufacturing Project

A properly designed building will be constructed which insures smooth

functioning of all operations. The building will have well-ventilated and
appropriate separate rooms like Office and Factory Block, Commercial center,
Compound and fences and parking lots. The detail as follows

S/n Description Area/m2

1 factory Building 1000
2 Office building (G+1) 500
3 Store for raw materials 500
4 store in finishing materials 500
5 Commercial center (shop) 300
6 Generator and pump house 50
7 Guard house 50
8 Parking area 100
9 Garden area 500
Total 3500

5.4. Environmental impact assessment

The project will seriously involve itself protecting conserving and developing
the natural and flora of the project area in line with the millennium
development goal. To this to will play a vital role in participating the varies
organization and the community around the project area to from an
environmental commute in charge of all environmental issues to be handled
in accordance to varies environmental and water policies of 97/99.
The owner of the project believes to undertake several environmental issues
for the conservation development and creation of sustainable environmental
around the project area.

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 Project Proposal on Gypsum Powered Manufacturing Project

6. ORGANIZATIONS AND MANAGEMENT

6.1. Organizational Structure

The organizational structure of the project is designed by including all the

necessary personal under the right division. At the top of the organizational
structure, there will be a general manager with the responsibility of
supervising the overall activity of plant. Depending up on the nature of the
center and the amount of work to be performs under each will be supervised
by the unit head that is accountability for general manager

CEO

Adviser G/Manager Internal Auditing

& Inspection

Production
Manager

Secretary

Sales & technical Marketing Admin &

Unit Unit finance Unit

As clearly shown the organizational structure, the integrated projected center

has CEO three Departments under the general manager, Addition and the
internal Auditing and inspection. The departments are the production
Department, the marketing department and the general service department
under each department there are different section which are undertaking
different activities
6.2. Management

As to the management of the project is concerned the owner will be

responsible for the overall project planning, co-ordination and
implementation. After project implementation, the promoter serves as a top
management body and frequently visits and supervises the organization.

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 Project Proposal on Gypsum Powered Manufacturing Project

The promoter is a business man person who has a long year experience in
managing business activities. Therefore, the extensive experience he has
enables him to organize and properly manage the envisaged project

6.3. Manpower Requirement and availability

For smooth and efficient operation of the organization, it has been anticipated
that each units will have adequate number of qualified and experienced
manpower. The project G/manager will hire qualified and experienced in
management whose main responsibility is to coordinate the overall activity of
the project.

The distinct units have their own operational teams under them. To fill in all
these work units with the required manpower the project needs 99 permanent
employees out of this 59 are skilled and 40 are unskilled employee, and 150
casual workers are participate the project For smooth operation of the project,
employees will be given on job training, clear duties and responsibilities
under the direct supervision of their respective units.

Table 6.1: Manpower Requirement

Sr. Req. Salary Annual
Description Qualification
No. No. (Birr) salary
8,0 96
1 Plant manager BSc in Agricultural/agronomy 1
00.00 ,000.00
Technical and 8,0 96
2 BSc in Management 1
production manager 00.00 ,000.00
Quality 8,0 192
3 BSc in Chemistry 2
controller/chemist 00.00 ,000.00
6,0 144
4 Production supervisor BSc in management 2
00.00 ,000.00
Gypsum Production 5,0 120
6 Skill worker 2
Expert 00.00 ,000.00
6,0 144
7 Secretary BSc in secretarial science 2
00.00 ,000.00
5,0 60
8 Personnel Diploma in management 1
00.00 ,000.00
5,0 60
9 Financial manager BSc in accounting 1
00.00 ,000.00
4,0 48
10 Accountant - clerk Diploma in accounting 1
00.00 ,000.00
Diploma in 4,0 48
11 Cashier 1
accounting/secretarial 00.00 ,000.00
12 Salesman /Purchaser Diploma marketing 1 5,0 60
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 Project Proposal on Gypsum Powered Manufacturing Project

00.00 ,000.00
2,0 24
13 Store keeper Diploma in Accounting 1
00.00 ,000.00
3,0 72
14 Shift leader diploma 2
00.00 ,000.00
Diploma in Mechanical 5,0 120
15 Mechanic 2
Engineering 00.00 ,000.00
Diploma in Electrical 120
16 Electrician 2
Engineering 5,000.00 ,000.00
720
18 Production worker 8th Grade or above 40
1,500.00 ,000.00
24
19 Cleaner 2
8th Grade 1,000.00 ,000.00
48
20 Driver 2
12 complete 2,000.00 ,000.00
48
21 Guard 4
8th Grade or above 1,000.00 ,000.00
total
70 2,244,000.00

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 Project Proposal on Gypsum Powered Manufacturing Project

7. FINANCIAL STUDY

7.1. General

Financial analysis of the proposed project will be projected to test the

financial visibility if the investigated organization. Quantifying both project
cost and benefits over the assumed project life, which is ten years, made the
project visible. Besides it has been tried to make a realistic forecasting of
costs and the benefits based in current market price of all necessary
materials. Once the anticipated production operation has been attained both
projects cost and revenue is estimated to be consumed to be compensated by
increasing in sales revenue
7.2. Investment cost

The cost of the project is classified as fixed incitement cost and initial working
capital. With regards to fixed investment cost of the project, the land lease,
building and civil works cost, machinery and equipment cost office furniture
costs and fuel costs will be required. As to working and operating cost a brief
illustration will be given as to utilities, salary expense, maintenance cost and
depreciation cost and the other related costs
7.2.1. Fixed costs
This include the land development, building and civil works cost, machinery
and equipment cost office furniture costs.
Table 7.1: land development
S/N Description Estimated cost
1 land Cleaning and leaving 700,000
2 Cannel work 400,000
Total 1,100,000

Table7.2: Building construction cost

estimated
S/n Description Area/m2
cost
1 factory Building 1000 2,500,000.00
2 Office building (G+1) 500 1,500,000.00
4 Store for raw materials 500 2,000,000.00
5 store in finishing materials 500 2,000,000.00
6 Commercial center (shop) 300 200,000.00

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 Project Proposal on Gypsum Powered Manufacturing Project

7 Generator and pump house 50 70,000.00

8 Guard house 50 70,000.00
19 Parking area 100 100,000.00
10 Garden area 500 60,000.00
Total 3500 8,500,000.00

Table7.3: Machinery cost

S/N List of Machineries Unit Number Estimated cost

1 set 1 5,500,000.00
Gypsum powder making plant
(Vibration feeder, Grinding, mill
(jaw crusher), cleaner (Vibrating
Screen), Separator)
2 Parking materials set 1 1,500,000.00
3 Chalk production Line set 1 500,000.00
Grand Total 7,500,000.00

Table7.4 Summary of fixed cost

Cost Estimate
S/n Description
(Birr)
1 Land development 1,100,000
2 Building & Constructions 8,500,000
3 Machinery and equipment 7,500,000
4 office furniture and vehicles 3,750,000
Total 20,850,000

7.2.2. Variable cost/ operation Cost

Working capital is the amount of money that together with fixed investment
costs constructed initial project capital to implement the project. The required
initial working capital would been estimated from the project annual
operational cost and is very important for the smooth operation of the project
As can been seen from its detailed works, the total initial working capital
requirement of the project
Direct costs
It is the cost and raw materials that used to directly implemented on the
project

Table 7.5 List of raw Material and estimated cost

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 Project Proposal on Gypsum Powered Manufacturing Project

S/N Description Unit Tone Unit price/qt Estimated Cost

1 Gypsum stone Tone 4,000 800.00 3,200,000.00
2 Paper Tone 210 10,500.00 2,205,000.00
3 Pulp tone 14 5,250 73,500.00
4 Additives tone 35 7,500.00 262,500.00
Total 5,741,000.00
Packaging Materials
1 Carton box Tone 2 500,000 1000000
Polypropylene
2 1 650,000 650000
bag, tone
Total 1,650,000.00
Grand Total 7,391,000.00
Administration cost

i) Employee benefits It includes medical expense, uniform and other

incentive package and assumed to be 25% of annual salary expense =
birr 561,000
ii) Repair and maintenance It is assumed to be 1% of fixed investment
cost = birr 395,000/year.
iii) Insurance: It is assumed to be 1% of fixed investment cost = birr
197,500/year.
iv) Office supplies: Including stationery and sanitary supplies annual
cost of birr 80,000 is considered.
v) Miscellaneous expense: It includes cost of land rent, telephone and
postage, audit, legal and license fees and other miscellaneous
expenses. The total annual cost of these cost components is estimated
to be birr 77,000 /year.

Table7.6 .Summary of Initial Working capital requirement

S/n Description 6 Months cost Annual cost
1 Direct cost
1.1 raw materials (Gypsum Stone) 2,870,500.00 5,741,000.00
1.2 Packaging material 825,000.00 1,650,000.00
Subtotal(1) 3,695,500.00 7,391,000.00
2 Administrative costs
-
2.1 Salary and wage 1,122,000.00 2,244,000.00
2.3 Employee benefits 280,500.00 561,000.00
2.4 Repair and maintenance 197,500.00 395,000.00
2.5 Insurance 98,750.00 197,500.00

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 Project Proposal on Gypsum Powered Manufacturing Project

2.6 utilities 50,000.00 100,000.00

2.7 Office supplies 40,000.00 80,000.00
2.8 Miscellaneous expense 38,900.00 77,800.00
Sub total 1,827,650.00 3,655,300.00
Initial W.C. requirement 5,523,150.00 11,046,300.00

7.3. Project Capital and financing

7.3.1. Project Capital

The total investment capital of the project is estimated at birr 26,373,150 of
which birr 20,850,000 (80%) is for purchase exiting factory while the
remaining balance of birr 5,523,150 (20%) will be initial working capital. The
detail of investment capital of the project is given below:
Table 7.10 Project capital
S/n Description Estimated cost
1 Fixed cost
1.1 Land development 1,100,000
1.2 Building & Constructions 8,500,000
1.3 Machinery and equipment 7,500,000
1.4 office furniture and vehicles 3,750,000
subtotal(1) 20,850,000
2 Working capital (6 month)
2.1 purchase raw cost 3,695,500
2.2 Admin cost 1,827,650
Subtotal(2) 5,523,150
Total Cost 26,373,150

7.3.2. Financing
The total investment capital of the project is to be financed from the
promoter’s equity and bank loan. Out of the total capital birr 7,911,945
(30%) is contributed by the promoter while the remaining balance of birr
18,461,205 (70%) is to be financed by local banks. The bank loan will be
repaid based on the following terms and conditions:
 Loan amount = birr 18,461,205
 Installment period/ term = 10 years
 Interest on loan (including service charge) = 12.5%

Table 7.11 Loan Repayment Schedule

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 Project Proposal on Gypsum Powered Manufacturing Project

Year
Principal Interest
Year ending
Repayment Payment Balance
0 - - 18,461,205
1 1,846,121 2,307,651 16,615,085
2 1,846,121 2,076,886 14,768,964
3 1,846,121 1,846,121 12,922,844
4 1,846,121 1,615,355 11,076,723
5 1,846,121 1,384,590 9,230,603
6 1,846,121 1,153,825 7,384,482
7 1,846,121 923,060 5,538,362
8 1,846,121 692,295 3,692,241
9 1,846,121 461,530 1,846,121
10 1,846,121 230,765 0
0

Depreciation of fixed investment items

The straight-line method has been used to depreciate/amortize all fixed items
of the project. The depreciation rate applied for all fixed assets is given below:
Table 7.12 Depreciation Schedule
Annual Depreciation
Original
S/n Item Amount
Value %
(Br.)
1 Land development 1,100,000 5 55,000
2 Building & Constructions 8,500,000 5 425,000
3 Machinery and equipment 7,500,000 10 750,000
4 office furniture and vehicles 3,750,000 10 375,000
Total 20,850,000 - 1,230,000

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 Project Proposal on Gypsum Powered Manufacturing Project

Table 7.13 Summary of project Annual production costs in birr

S/n Cost item Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
1 Direct cost
1.1 raw materials 5,741,000 6,028,050 6,329,453 6,645,925 6,978,221 7,327,132 7,693,489 8,078,164 8,482,072 8,906,175

1.3
Packaging 1,650,000 1,732,500 1,819,125 1,910,081 2,005,585 2,105,865 2,211,158 2,321,716 2,437,801 2,559,692
materials
7,391,000 6,028,050 6,329,453 6,645,925 6,978,221 7,327,132 7,693,489 8,078,164 8,482,072 8,906,175
2 Administrative costs
2.1 Salary and wage 2,244,000 2,356,200 2,474,010 2,597,711 2,727,596 2,863,976 3,007,175 3,157,533 3,315,410 3,481,181
2.2 Employee benefits 561,000 589,050 618,503 649,428 681,899 715,994 751,794 789,383 828,853 870,295

2.3
Repair and 395,000 414,750 435,488 457,262 480,125 504,131 529,338 555,805 583,595 612,775
maintenance
2.4 Insurance 197,500 207,375 217,744 228,631 240,062 252,066 264,669 277,902 291,797 306,387
2.5 utilities 100,000 105,000 110,250 115,763 121,551 127,628 134,010 140,710 147,746 155,133
2.6 Office supplies 80,000 84,000 88,200 92,610 97,241 102,103 107,208 112,568 118,196 124,106

2.7
Miscellaneous 77,800 81,690 85,775 90,063 94,566 99,295 104,259 109,472 114,946 120,693
expense
Sub total 3,655,300 3,838,065 4,029,968 4,231,467 4,443,040 4,665,192 4,898,452 5,143,374 5,400,543 5,670,570
Total cost working capital 11,046,300 9,866,115 10,359,421 10,877,392 11,421,261 11,992,324 12,591,941 13,221,538 13,882,615 14,576,745

Note: Production costs are assumed to increase by 5% annually.

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 Project Proposal on Gypsum Powered Manufacturing Project

7.4. Revenue projection

The project will collect its revenue from the provision of Gypsum, Phoenix
Powder , Chalk. The selling of intended output has estimated based on the
current market price of similar service provision in district as well as country.
The annual sale program is formulated based on proposed plant capacity
considered the problem of market penetration and skill development of
production at the initial stage of the production period.

Table 6.14 Description of revenue projection

S/ Unit
Raw materials unit Total price
N Qty price
1 Gypsum powder for wall chuck 25kg bag 75000 160 12,000,000.00
2 Gypsum powder for board Design 25kg bag 70000 125 8,750,000.00
3 Chalk 50 pcs box 10000 50 500,000.00
Total 21,250,000.00

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 Project Proposal on Gypsum Powered Manufacturing Project

Financial statementsProjected
Profit/loss statementMR. SHIMELES SEMEANEH
Gypsum Powder Production Factory
Projected profit/loss statement
In ' birr
Project Year
Description 1 2 3 4 5 6 7 8 9 10
Gross Sales 21,250,000 22,312,500 23,428,125 24,599,531 25,829,508 27,120,983 28,477,032 29,900,884 31,395,928 32,965,725
Less: Production
11,046,300 11,598,615 12,178,546 12,787,473 13,426,847 14,098,189 14,803,098 15,543,253 16,320,416 17,136,437
costs
Gross profit 10,203,700 10,713,885 11,249,579 11,812,058 12,402,661 13,022,794 13,673,934 14,357,631 15,075,512 15,829,288
Less: Interest on loan 2,307,651 2,423,033 2,544,185 2,671,394 2,804,964 2,945,212 3,092,473 3,247,096 3,409,451 3,579,924
Less: Depreciation 1,230,000 1,291,500 1,356,075 1,423,879 1,495,073 1,569,826 1,648,318 1,730,734 1,817,270 1,908,134
Profit before tax 6,666,049 6,999,352 7,349,319 7,716,785 8,102,625 8,507,756 8,933,144 9,379,801 9,848,791 10,341,230
Less: Income tax 2,333,11
2,449,773 2,572,262 2,700,875 2,835,919 2,977,715 3,126,600 3,282,930 3,447,077 3,619,431
(35%) 7.28
Net Profit 4,332,932 4,549,579 4,777,058 5,015,911 5,266,706 5,530,041 5,806,543 6,096,871 6,401,714 6,721,800
Note: Sales revenue is assumed to increase by 5% annually

7.4.1. Projected cash flow statement

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 Project Proposal on Gypsum Powered Manufacturing Project

MR. SHIMELES SEMEANEH

Gypsum Powder Production Factory
Projected cash flow statement
In 'birr
Project Year
Description
0 1 2 3 4 5 6 7 8 9 10
Cash Inflow
Equity 7,911,945 - - - - - - - - - -
Bank loan 18,461,205 - - - - - - - - - -
24,599,53
Total revenue - 21,250,000 22,312,500 23,428,125 25,829,508 27,120,983 28,477,032 29,900,884 31,395,928 32,965,725
1
Depreciation - 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000 1,230,000
23,369,53
Total Inflow 26,373,150 20,020,000 21,082,500 22,198,125 24,599,508 25,890,983 27,247,032 28,670,884 30,165,928 31,735,725
1
Cash Out Flow
Fixed Cost 20,850,000 - - - - - - - - - -
12,787,47
Initial W.C 5,523,150 11,046,300 11,598,615 12,178,546 13,426,847 14,098,189 14,803,098 15,543,253 16,320,416 17,136,437
3
Loan Repayment 1,846,121 1,846,121 1,846,121 1,846,121 1,846,121 1,846,121 1,846,121 1,846,121 1,846,121 1,846,121
Tax 35% 2,333,117 2,449,773 2,572,262 2,700,875 2,835,919 2,977,715 3,126,600 3,282,930 3,447,077 3,619,431
14,633,59
Total Out flow 26,373,150 15,225,538 13,444,736 14,024,666 15,272,967 15,944,310 16,649,219 17,389,374 18,166,537 18,982,557
4
Net Inflow - 4,794,462 7,637,765 8,173,459 8,735,938 9,326,541 9,946,674 10,597,813 11,281,510 11,999,392 12,753,167
Cumulative 29,341,62
- 4,794,462 12,432,227 20,605,685 38,668,164 48,614,837 59,212,651 70,494,161 82,493,553 95,246,720
balance 3

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 Project Proposal on Gypsum Powered Manufacturing Project

7.4.2. Balance sheet

MR. SHIMELES SEMEANEH

Gypsum Powder Production Factory
Balance sheet statement

 Description Asset Liabilities and capital

Current Asset
raw materials 2,870,500
Packaging material 825,000
Subtotal 3,695,500
Salary and wage 1,122,000
Employee benefits 280,500
Repair and maintenance 197,500
Insurance 98,750
utilities 50,000
Office supplies 40,000
Miscellaneous expense 38,900
Subtotal 1,827,650
Fixed Asset 5,523,150
Land development 1,100,000
Building & Constructions 8,500,000
Machinery and equipment 7,500,000
office furniture and vehicles 3,750,000
Total Fixed cost 20,850,000
Total asset 26,373,150
Liability and capital
Liability (Loan payable) 18,461,205
Initial capital 7,911,945
26,373,150

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 Project Proposal on Gypsum Powered Manufacturing Project

7.5. Viability and other measurement

MR. SHIMELES SEMEANEH

Gypsum Powder Production Factory
Financial IRR computation
In birr
Year 0 1 2 3 4 5 6 7 8 9 10
Gross income 21,250,000 22,312,500 23,428,125 24,599,531 25,829,508 27,120,983 28,477,032 29,900,884 31,395,928 32,965,725
Total costs 26,373,150 11,046,300 11,598,615 12,178,546 12,787,473 13,426,847 14,098,189 14,803,098 15,543,253 16,320,416 17,136,437
Gross profit -26,373,150 10,203,700 10,713,885 11,249,579 11,812,058 12,402,661 13,022,794 13,673,934 14,357,631 15,075,512 15,829,288
Less: Profit tax 3,571,295 3,749,860 3,937,353 4,134,220 4,340,931 4,557,978 4,785,877 5,025,171 5,276,429 9049001.6
After tax net
-26,373,150 6,632,405 13,478,615 13,976,013 14,503,150 15,061,512 14,873,630 15,596,585 16,355,688 17,152,746 17,989,656
benefit
DF at 35% rate 1 0.741 0.549 0.406 0.301 0.223 0.165 0.122 0.091 0.067 0.05
Present Value -26,373,150 7,560,942 12,249,563 9,511,819 7,404,459 5,759,980 4,474,962 3,474,198 2,720,980 2,103,527 1,648,286
Net present
30,535,566 - - - - - - - - - -
Value
DF at 30% rate 1 0.769 0.592 0.455 0.35 0.269 0.207 0.159 0.123 0.094 0.073
Present Value -26,373,150 16341250.0 13209000.0 10659796.9 8609835.9 6948137.6 5614043.5 4527848.1 3677808.7 2951217.2 2406497.9
Net present
48,572,286 - - - - - - - - - -
Value
After tax IRR = 30 + 5 (30.5/48.5million)
=33.1%

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 Project Proposal on Gypsum Powered Manufacturing Project

7.5.1. NPV (Net Present Value)

It is a method of calculating the expected net gain or loss from project by
discounting rate of all expected future cash inflow and outflows to the
present point in time In the above table shoes that NPV at 30% and 35 %
discount rate is 48.5/30.5 million birr respectively, this figure is positive
value or NPV>0 it is indicate that accepted the project until 30 % and 35 %
of discount rate
Break-even analysis
The break-even analysis establishes a relationship between operation
costs and revenues. It indicates the level at which costs and revenue are
in equilibrium. To this end, the break-even point for capacity utilization
and sales value estimated by using income statement projection are
computed as followed.

Break- Even Sales Value = Fixed Cost + Financial Cost

Variable Margin ratio (%)

7.5.2. Payback Period (PBP)

The payback period is the amount of time required for a firm to recover its
initial investment in a project, as calculate from cash inflow
The investment cost and income statement projection are used to project
the pay-back period

PBP = Initial investment Cost

Net Profit + Depreciation

= 26,373,150
4,332,932 1,230,000

= 4.74=5Years
The payback period =5 is less than the maximum acceptable payback
period (10) therefore accept the project.

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 Project Proposal on Gypsum Powered Manufacturing Project

7.5.3. IRR

The internal rate of the project is the rate of discount that radios the present
value of the investigated project to zero. In calculating the IRR, the discount
rate can be adjusted until the NPV becomes Zero or at least as to zero.
Hence, the IRR of this project is calculated as follows
After tax IRR = 30 + 5 (30.5/48.5 million)
=33.1%
IRR=33.1% of the project returns its initial investment cost within its life
Therefore the project is financially viable with an internal rate of return (IRR)
of 33.1% and net present value (NPV) 57 million birr at discount rate 35%.
8. SENSITIVITY ANALYSIS

Sensitivity analysis is variant of scenario analysis in which each scenario

represents a change in only one variable, rather than a number of variables.
For the proposed project, the sensitivity of the project has been computed at
30% and 35% for sales reduction, operating cost increase and investment
cost increased accordingly, as described in table 7.16 the result shows that
IRR at 31.1% operating cost increase and 30 and 35% investment cost
increase and 30% service sales reduction. Predicting among these sales
reduction is more sensitive to the project and it should further expand after
the project proposed life time because in this case NPV equal zero at
IRR=31.1
9. RISK ANALYSIS

The major risk of this project shall be high market price fluctuation and
turnover the skilled and trained man power. These risks can be mitigated.
The high staff turnover may be lessened by creating conductive working
atmosphere and providing some benefits. For this project, 25% benefit is
proposed for the permanent employees
Characteristic (Personal) Risk: This is the most important risk, which
should be seriously considered? As to this company, the promoter have
sufficient years of work experience in both government and private

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 Project Proposal on Gypsum Powered Manufacturing Project

organization (leading private business by engaging themselves), so personal

risk is minimum under this context
Business Risk: The fate of the business is generally found to be dependable.
The demand- supply analysis exhibits the need of the service of the business
organization. According to the overall demand the effect of competitors in
the sector would not be an immediate alarming threat at least for the
coming few years. In additional to this. Long year experience of the owner in
the field will help to react against any adverse situation in the business.
However, the reaction of competitors should be attended. In additional to an
advanced promotional work and sustainable goodwill development by
creating new and best quality products with good service deliveries

Collateral Risk: Since the owners of the project are engaged on different
related business, there is no any risk related to collateral. In this regard, the
proposed building and other proposed equipment and the business as a
whole are dependable securities. The experience and skill of the owner as
well as the manager and the other expertise add confidence to the lenders.
Therefore, there is no risk regarding collateral in general.

Construction Risk: Construction risk is one of the most important areas

of risk that need great consideration during project implementation. In the
case of project construction, the construction work of the proposed
building will be made by phase with self-response supervision. Hence, there
is no as such serious risk related to construction work.

All the identified risks, which are related to the universally accepted lending
policy, are to the acceptable level that keeps the lender’s interest in safe
position. Furthermore, the quality of the assets of the company is
dependable and the projected finical reports show that the company will
have a capacity to pay the principal and interest without any problem with
in short period of time.

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 Project Proposal on Gypsum Powered Manufacturing Project

10. MONITORING AND EVALUATION

Monitoring and Evaluation (M&E) has long been recognized as a vital

aspect of development projects generally and of industrial and services
projects in particular.  The monitoring of project performance consists of
the tracking of human, physical and financial resources and the recording
of how they are converted into outputs (project goods and services), and in
turn, outcomes and impacts.

11. CONCLUSION AND RECOMMENDATION

Conclusion: The Project is found to be operationally profitable & has

significant socio-economic benefits. According to the projected income
statement, the envisaged project starts earning profit from the first year of
production. The income statement and other profitability indicators show that
the project is viable. The project is believed to have significant social and
economic benefits that accrue to the society beyond those financial returns
to its owner. The most remarkable social benefits can be expressed in terms
of job creation that leads to reduction in the level of unemployment.

Recommendation: The project directly employs 87 permanent persons;

therefore, considering the attractive financial and economic benefits the
project is to produce, the promoter has made the necessary preparation
hoping that all the concerned offices & financial institutions should give
their support to facilitate the implementation of this plan.

38